Free Cash FlowBurkhalter Inc. reported the following on the company's statement of cash flows in Year 2 and Year 1: Year 2Year 1Net cash flows from operating activities$385,000 $367,000Net cash flows used for investing activities(293,000) (330,000)Net cash flows used for financing activities(83,000) (55,000)Seventy percent of the net cash flows used for investing activities was used to replace existing capacity.a. Determine Burkhalter's free cash flow for both years.Year 2$fill in the blank 1Year 1$fill in the blank 2b. Has Burkhalter's free cash flow improved or declined from Year 1 to Year 2?Improved

Cash flow statement is prepared at the end of the accounting period to assess the flow of cash…

Answered: Burkhalter Inc. reported the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Free Cash Flow

Burkhalter Inc. reported the following on the company's statement of cash flows in Year 2 and Year 1:

	Year 2
Net cash flows from operating activities	$385,000	$367,000
Net cash flows used for investing activities	(293,000)	(330,000)
Net cash flows used for financing activities	(83,000)	(55,000)

Seventy percent of the net cash flows used for investing activities was used to replace existing capacity.

a. Determine Burkhalter's free cash flow for both years.

Year 2	$fill in the blank 1
Year 1	$fill in the blank 2

b. Has Burkhalter's free cash flow improved or declined from Year 1 to Year 2?
Improved

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